Procedural Omissions by Liquidator Do Not Constitute Perjury Without Evidence of Malafide Intent or Deliberate Falsehood
- REEDLAW
- Dec 22, 2024
- 3 min read
NCLAT held that procedural omissions by the liquidator do not constitute perjury in the absence of evidence demonstrating malafide intent or deliberate falsehood.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising Justice Ashok Bhushan (Chairperson) and Technical Members Mr. Barun Mitra and Mr. Arun Baroka, reviewed an appeal and held that procedural errors or omissions by a liquidator, such as failing to implead a party in a Section 19 application, do not warrant perjury proceedings unless supported by conclusive evidence of malafide intent, deliberate falsehood, or suppression of facts, particularly when such actions are assessed in the context of the liquidator’s duties and the prevailing circumstances of the liquidation process.
The National Company Law Appellate Tribunal (NCLAT) addressed an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016, challenging an order of the National Company Law Tribunal (NCLT), Jaipur Bench, dated 27.08.2024. The impugned order dismissed the Appellant's application seeking perjury proceedings against the liquidator, Mr. Sumit Binani, for allegedly making false statements in contempt proceedings. The Appellant, associated with Gujarat NRE Coke Ltd., which was admitted into liquidation on 11.01.2018, argued that the liquidator's affidavit contained deliberate misrepresentations regarding the Appellant's interest in the Corporate Debtor’s office premises.
The crux of the matter revolved around access to the office premises of the Corporate Debtor. The liquidator’s attempts to secure the premises included filing a Section 19(2) application, leading to an NCLT order directing the handover of the keys. The Appellant alleged that despite the liquidator’s prior acknowledgement of the Appellant’s possession of the keys, the Appellant was not impleaded in the Section 19 proceedings. Moreover, the liquidator allegedly made contradictory and false assertions during subsequent contempt proceedings to justify these actions. The Appellant sought a preliminary inquiry, referral to the Chief Metropolitan Magistrate under Sections 193 and 340 of the IPC, and disciplinary action by the Insolvency and Bankruptcy Board of India (IBBI). The NCLT, however, declined the application, citing jurisdictional limitations.
The NCLAT, in its deliberations, scrutinized the sequence of events and the liquidator's conduct. The Tribunal acknowledged procedural concerns stemming from the liquidator's omission of the Appellant in the Section 19 application but noted that this did not substantiate claims of malafide intent. The liquidator’s efforts to access the premises, including correspondence with the Corporate Debtor’s Key Managerial Personnel (KMPs), were deemed reasonable, especially given the operational challenges posed by the COVID-19 pandemic. The NCLAT emphasized the liquidator’s duty to expedite the liquidation process and found that the contested actions aligned with this obligation.
The Tribunal also examined the NCLT’s findings, which acknowledged an "error" in securing the Section 19 order without impleading the Appellant but concluded that the error did not warrant perjury proceedings. The NCLAT concurred, observing that the liquidator’s statements lacked evidence of deliberate falsehood or malicious intent. The subsequent inclusion of the Appellant in contempt proceedings followed orders of the Adjudicating Authority, further dispelling claims of procedural impropriety.
Ultimately, the NCLAT held that the Appellant failed to provide conclusive evidence of the liquidator’s malafide conduct or suppression of facts. The appeal was dismissed on the grounds that no sufficient basis existed to interfere with the NCLT’s decision, and the plea for initiating perjury proceedings lacked merit. No costs were imposed in the dismissal.
Mr. Debal Banerjee Sr. Advocate with Mr. Bharat Sood, Advocates rep[resented the Appellant.
Mr. Arjun Asthana, Ms. Shalini Basu and Ms. Shubhangi Gupta, Advocates appeared for the Respondent.
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